Legal Foundations of the Gambling Business in Georgia
In Georgia, the organization and conduct of lotteries, gambling and profitable games, as well as the supply of gambling and/or profitable games, is regulated by the Law of Georgia on Organizing Lotteries, Gambling and Profitable Games. The first article of this law states directly that it establishes the legal foundations of this activity, which means that any project in the gambling business must be planned within the framework of these norms. The law determines which games are admissible at all, where they may be organized, which activities require a permit, and who may obtain that permit.
If you are planning to open a casino, a slot machine hall, a gambling club, a totalizator, a lottery, or to organize games in a systemic-electronic form, this guide explains the conceptual apparatus of the sector, why a permit is an unconditional precondition, for what terms and to whom permits are issued, and which restrictions apply to the permit holder. We rely exclusively on the exact text of the law as reflected in its consolidated edition, without replacing legal norms with assumptions.
What Is the Gambling Business: Key Statutory Concepts
The third article of the law describes the entire conceptual apparatus without which the licensing regime cannot be read correctly. The gambling business is defined as a lottery, gambling and/or profitable game organized by a person under the procedure established by Georgian legislation, whose result depends entirely or partially on chance and in which a player participates in order to receive monetary or in-kind winnings, together with the supply of gambling and/or profitable games. The principal types of games are the following:
- gambling games — games whose result depends entirely or partially on chance, conducted by means of cards, dice (except backgammon), a gaming wheel (roulette), a gaming machine, a casino table, a club table and/or other gaming inventory; their organization (except a gambling tournament) is admissible only in a casino, a slot machine hall and/or a gambling club;
- profitable games — lotto, bingo and totalizator, conducted in specially equipped facilities, where winnings are determined from the prize fund;
- a promotional game — a game conducted for the purpose of the fast and effective sale of a specific product or service, whose ticket is distributed free of charge;
- a lottery — a voluntary group or mass game in draw-based and instant varieties;
- organization in a systemic-electronic form — the conduct of games using the internet, telephone and/or specially equipped electronic means, in compliance with the requirements established by the law.
The concept of the supply of gambling and/or profitable games stands apart: it is the direct or indirect supply of essential products/services to the organizer of the game or to a person outside Georgia, which may influence the results of the game. Essential products/services include the random number generation platform, the jackpot platform, the gaming platform, the player base, the financial base/system, the management system and gaming machines. The sector also operates an electronic control system, introduced through a selected person by the Revenue Service, which monitors the permit holder's compliance with permit conditions.
The Permit Requirement and the Consequences of Unlicensed Activity
Under the fifth article of the law, the conduct of every type of gambling and/or profitable game on the territory of Georgia, as well as the supply of gambling and/or profitable games, requires a permit in accordance with the Law of Georgia on Licenses and Permits. Conducting games or supplying them without a permit, as well as non-fulfillment of permit conditions, is considered a violation of the law and entails liability determined by Georgian legislation. The same article establishes that only the organization of lotteries, gambling and profitable games envisaged by this law, and the distribution of their tickets, is admissible — a game format not allowed by the law cannot become part of a lawful operating plan.
In case a state of emergency or martial law is declared, the Government of Georgia is entitled to introduce a different procedure for the licensed activity in the gambling business, so the risk of regulatory change in crisis scenarios must be accounted for in business planning. With respect to promotional games, the law additionally provides that charging any form of fee for participation is impermissible, and that a permit for a promotional game aimed at the sale of tobacco products, tobacco accessories or devices intended for tobacco consumption is not issued.
Permit Categories, Terms and Specific Rules
Under the eleventh article of the law, the following activities are subject to permitting: organizing a promotional game; organizing a casino; organizing casino games in a systemic-electronic form; organizing a totalizator; organizing totalizator games in a systemic-electronic form; organizing a slot machine hall; organizing slot machine games in a systemic-electronic form; organizing lotto; organizing bingo; organizing a gambling club; and supplying gambling and/or profitable games. An important condition for the issuance of these permits is that they are issued only to an entrepreneur registered in Georgia — for a foreign structure this means that the activity must be carried out through an entity with Georgian registration.
In terms of duration, the law distinguishes the following: a permit for organizing a casino, a totalizator or a slot machine hall, as well as a permit for organizing casino or slot machine games in a systemic-electronic form, is issued for a term of 5 years; systemic-electronic permits issued on the basis of another permit, a permit for organizing totalizator games in a systemic-electronic form and a permit for organizing a gambling club — for the remaining term of the underlying permit; a permit for a promotional game — for a term of 1 year; permits for lotto, bingo and for the supply of games — for a term of 5 years.
A single permit for organization in a systemic-electronic form allows the operation of no more than 2 websites under internet domain names, and where two domains exist, one must be used for players holding Georgian citizenship and the other for players holding foreign citizenship. A permit for organizing a gambling club is issued only in the municipality of the city of Tbilisi, to a holder of a permit for organizing a casino and/or a slot machine hall, and the club must be arranged as a separate object, independent of the casino hall or the slot hall. When the activity of the physical facility is terminated, the systemic-electronic activity is admissible during the current quarter but for no more than 60 calendar days; in each following quarter it may continue only if the physically equipped facility is renewed for at least 30 days.
Who Cannot Obtain a Permit and Which Restrictions Apply
Before issuing a permit, the law assesses both the fiscal and the reputational profile of the applicant and its management circle. Where recognized tax arrears exist, a permit for gambling activity is not issued. It is also forbidden to issue a permit to a person whose authorized representative, founder/partner or beneficial owner has been convicted of, or found guilty of, an intentional economic crime, including a crime in the sphere of financial activity, or of an intentional serious or especially serious crime, whose conviction has not been expunged or vacated. This requirement continues throughout the validity of the permit — the compliance of the respective persons of the holder must be ensured on an ongoing basis.
Among the additional restrictions: the transfer of a permit to another person is prohibited; participation in a gambling game must not offer the possibility of receiving winnings in kind; and a casino must have a specially equipped windowless safe where a reserve amount of no less than 10 000 lari per each casino table is kept. In operational planning, these requirements must be reflected in the budget and in internal control procedures in advance.
Frequently Asked Questions
Is it possible to start a gambling business without a permit?
No. Under the fifth article of the law, the conduct of gambling and/or profitable games and the supply of games require a permit, while unlicensed activity is considered a violation of the law and entails liability. Any model that attempts to circumvent permit requirements indirectly is directly prohibited.
To whom are gambling permits issued?
The permits envisaged by the eleventh article of the law are issued only to an entrepreneur registered in Georgia. In addition, the existence of recognized tax arrears and the criminal record of the management circle preclude issuance, and the transfer of a permit to another person is prohibited.
For what term are permits issued?
Permits for a casino, a totalizator, a slot machine hall and for the systemic-electronic organization of casino or slot machine games are issued for 5 years, a promotional game permit for 1 year, and lotto, bingo and supply permits for 5 years. Permits issued on the basis of another permit remain in force for the remaining term of that underlying permit.
Where may gambling games be organized?
The organization of gambling games (except a gambling tournament) is admissible only in a casino, a slot machine hall and/or a gambling club, and, under the consolidated edition of the law, also in a systemic-electronic form. A gambling club permit, however, is issued only in the municipality of Tbilisi, to a holder of a casino or slot machine hall permit.
How We Help on Legal.ge
The Legal.ge team offers comprehensive legal consultation on matters connected with the gambling business: we will assess your project against the requirements of the law, help you choose the form of the licensed activity, review the preconditions for obtaining a permit and prepare the list of steps necessary for your situation.
Contact us through Legal.ge — we work so that your decisions rest on a precise legal foundation and the launch of your gambling business is a planned and calculated process.